Navigating California’s Fair Chance Regulation: An Overview For Employers
California’s Fair Chance Regulation marks a significant shift in the landscape of employment regulations concerning criminal history. For employers in the state, these changes warrant a careful examination of their hiring practices and compliance with the new mandates.
In December of 2022, the California Civil Rights Department (CRD) proposed significant modifications to the state’s Fair Employment and Housing Act (FEHA) regulations concerning the use of criminal history in employment decisions. The resultant California Fair Chance Regulation will take effect on October 1, 2023. For employers in the state, these changes warrant a careful examination of their hiring practices and compliance with the new mandates.
Understanding the Fair Chance Regulation
The California Fair Chance Regulation clarifies that, with limited exceptions, employers have no legal obligation to check the criminal histories of job applicants or current employees. However, if they opt to do so, they must adhere to the legal limitations set forth in the regulations.
Only employers required by law to conduct criminal background checks may do so before making a conditional offer of employment. Other employers that conduct criminal checks may do so after extending a conditional offer of employment. All employers must exercise caution and conduct an individualized assessment before making any adverse employment decisions based on an applicant’s criminal conviction history.
Expanded Definitions and Prohibitions
The amendments expanded the definition of “applicant” to encompass existing employees who apply or express interest in different positions within their current organization. Furthermore, the term “employer” now includes not only direct employers but also entities acting as agents or evaluating an applicant’s criminal history on behalf of an employer, staffing agencies, and entities obtaining workers from a pool or availability list.
To promote fair hiring practices, the regulation forbids employers from including exclusionary statements in job advertisements or applications, such as “No Felons” or “Must Have Clean Record.” Instead, employers must evaluate an applicant’s suitability based on their qualifications and merits, without undue bias toward their criminal history.
Individualized Assessment and Evidence of Rehabilitation
When considering an applicant’s criminal history, employers must conduct an individualized assessment, taking into account various factors such as the nature and gravity of the offense, the time that has passed since the offense or completion of the sentence, and the nature of the job sought. The regulation also introduces non-exhaustive considerations for each factor, offering guidance to employers during this assessment process.
Employers may not require an applicant to provide a specific type of evidence demonstrating their rehabilitation. However, applicants may provide evidence of rehabilitation or mitigating circumstances voluntarily at any time during the hiring process, including their conduct during incarceration, employment history since the conviction or sentence completion, community service, and other rehabilitative efforts. Applicants may also disclose whether trauma, domestic or dating violence, sexual assault, stalking, human trafficking, duress, or other similar factors contributed to the offense or conduct. Further, applicants may identify a disability, such as a past drug addiction or mental impairment, contributed to the offense or conduct. The applicant may also note whether the likelihood of harm arising from similar conduct could be sufficiently diminished or eliminated by a reasonable accommodation made by the employer or whether the disability has been mitigated or eliminated by treatment or otherwise.
Employers cannot refuse to accept any evidence provided by the applicant. They must carefully evaluate this information and give applicants a fair chance to demonstrate their qualifications and readiness for the role.
Compliance and Implications for Employers
California’s Fair Chance Regulation marks a significant shift in the landscape of employment regulations concerning criminal history. Employers must take heed of these modifications and align their hiring practices accordingly. With the implementation date approaching, employers using criminal records to vet candidates should undertake a privileged review of their screening processes and related documents. This review should include adjudication standards, individualized assessments, and pre-adverse and adverse action notices. Moreover, third parties such as staffing agencies and background check firms that evaluate an applicant’s criminal history on behalf of an employer should be mindful of the reach of the regulation. Ensuring compliance with the new regulations will help mitigate legal risks and uphold fair hiring practices.
Employers should engage their legal counsel and must be vigilant about staying updated on employment regulation developments in California and nationwide. The dynamic landscape of legal requirements demands proactive measures to avoid penalties and reputational damage.
Release Date: August 17, 2023
Alonzo Martinez is Associate General Counsel at HireRight. Mr. Martinez is responsible for monitoring and advising on key legislative and regulatory developments globally affecting HireRight’s service delivery. His work is focused on ensuring HireRight’s performance as a consumer reporting agency and data processor complies with relevant legal, regulatory, and data furnisher requirements. Mr. Martinez obtained his Juris Doctorate from the University of Colorado, and is licensed by the Supreme Court of the State of Colorado. He is a member of the Colorado Bar Association Employment Law Division, the Association of Corporate Counsel, and the Professional Background Screening Association.